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Senate’s rice tariffication bill reported out to plenary

SENATOR Cynthia A. Villar reported out to the plenary on Monday the rice tariffication bill, which seeks to liberalize rice imports while imposing a tariff system on the commodity.
In her sponsorship speech, Ms. Villar, who chairs the Senate committee on agriculture, said the bill will help reduce rice prices and provide support for local farmers who will be affected by the influx of cheaper imported rice.
“It’s really timely that we implement rice tariffication, not only because of our commitment to the World Trade Organization (WTO) but also to address the country’s present problems with the price and supply of rice,” she said.
Senate Bill No. 1998 seeks to amend Republic Act No 8178 or the Agricultural Tariffication Act to implement a system of rice tariffs. A 35% duty will be imposed on imports coming from the Association of Southeast Asian Nations (ASEAN), while a 50% rate will apply to imports from non-ASEAN countries.
Ms. Villar said the bill will also remove the authority of the National Food Authority (NFA) to regulate the importation of rice and to issue import licenses or permits for the private sector.
“In effect, it will remove unnecessary government intervention in the rice market… and the government can focus on regulating to ensure food safety and fair market competition,” she said.
Another feature of the bill is the creation of the Rice Competitiveness Enhancement Fund consisting of an initial appropriation of P10 billion sourced from the national budget until such time that there are sufficient collections from tariffs.
Funding for succeeding years will come from the tariff revenue for rice importation, estimated at P8 billion yearly.
The proposed fund will be allocated as follows: 50% for grants to farmers’ associations, registered rice cooperatives, and local government units in the form of rice equipment, to be implemented by the Philippine Center for Post-Harvest Development and Mechanization (PhilMech); 30% for the development, propagation and promotion of inbred rice seeds to rice farmers and organizations, to be implemented by the Philippine Rice Research Institution (PhilRice); 10% in the form of credit at preferential rates to rice farmers and cooperatives to be managed by Land Bank and the Development Bank of the Philippines; and 10% for extension services to teach rice farmers modern methods of farming, seed production, and farm mechanization, to be administered by PhilMech, PhilRice, the Agricultural Training Institute (ATI) and the Technical Education and Skills Development Authority (TESDA).
Beneficiaries of the rice fund will be listed in the registry system for basic sectors in agriculture, which will also be managed by the Department of Agriculture (DA).
The bill also mandates the completion of the rice industry road map in order to encourage sustainable investment and to restructure delivery of the government’s support services in the rice industry.
The Bangko Sentral ng Pilipinas (BSP) and the National Economic and Development Authority (NEDA) have cited the rice tariffication bill as one of the measures that will help ease inflation, which hit 6.4% in August.
The bill’s counterpart version at the House of Representatives passed on third and final reading on Aug. 14. It has been identified as a priority bill by the Legislative-Executive Development Advisory Council (LEDAC). — Camille A. Aguinaldo

Tax bureau clarifies interest charge on unpaid tax is 12%

THE BUREAU of Internal Revenue (BIR) has released implementing rules and regulations for the interest rate imposed on unpaid taxes, as well as guidelines on how the charges are to be computed.
Bureau of Internal Revenue (BIR) logo
The BIR published Revenue Regulation (RR) 21-2018 yesterday reducing the interest charged on unpaid taxes to 12%, from 20% previously.
The Tax Reform for Acceleration and Inclusion (TRAIN) law requires that the unpaid interest rate should be “double the legal interest rate for loans or forbearance of any money in the absence of an express stipulation as set by BSP,” which is currently at 6%.
Although the BIR has been applying the 12% rate since the law became effective in January through memorandum orders, it has not consistently applied the rate for delinquencies and deficiencies.
It clarified the difference of tax treatment between delinquency interest and deficiency interest, noting that it shall “in no case be imposed simultaneously.”
“The RR was made with an illustration to show how it is going to be computed, because deficiency interest is different from delinquency,” BIR Deputy Commissioner Marissa O. Cabreros told reporters yesterday in a chance interview at the House of Representatives.
The regulation defines the deficiency charge as the “interest imposed on any deficiency tax due, which interest shall be assessed and collected from the date prescribed for its payment until: full payment thereof, or upon issuance of a notice and demand by the commissioner or his authorized representative, whichever comes first.”
A delinquency charge is the interest imposed on the failure to pay tax due on any return to be filed; tax due for which no return is required; a deficiency tax or “any surcharge or interest thereon on the due date appearing in the notice and demand” of the BIR until the amount is fully paid, which interest shall form part of the tax.
“Before, the interest was imposed simultaneously, and was doubled up,” said Ms. Cabreros.
Asked for comment, Isla Lipana & Co. Tax Managing Partner Maria Lourdes P. Lim welcomed the move as the issuance “while long overdue, considering that the TRAIN law became effective last Jan. 1, 2018, clarifies the proper application of the 12% deficiency interest rate.”
“There was confusion on the implementation as the BIR revenue district offices are not consistent in the application of the 12% interest rate particularly on settlement of tax assessment cases involving 2017 and prior years as there are no prescribed guidelines,” she said in an e-mail.
This is because some revenue officers have ruled that the rate only applies to assessment cases beginning 2018 as the guidelines only pertain to amendment of returns. — Elijah Joseph C. Tubayan

Senate warns DoH staffing may not meet needs of universal health care

SENATORS warned that the uncertain job security of health workers employed by the Department of Health (DoH) could disrupt the implementation of the Universal Health Care Bill next year.
Senate Minority leader Franklin M. Drilon, speaking during the budget hearing of the health department on Monday, said: “You cannot have an ‘endo’ situation in the DOH, because the services will be affected. Let us regularize them so that we can provide stability to our health system.”
“Endo” or end-of-contract is a hiring practice that denies workers a path to permanent employment and the related benefits.
Health Secretary Francisco T. Duque warned during the hearing about the possible displacement of more than 15,000 of 26,307 workers who are on job order status because of the reduction in the health human resources deployment (HHRD) portion of the department’s 2019 budget. He said the reduced funding will only accommodate about half of them, as contractuals.
The Department of Budget and Management (DBM) slashed the 2019 budget of the health department to P71 billion for 2019 from P107.3 billion last year.
Senator Joseph Victor G. Ejercito told reporters on Monday that reducing the roster of health care workers will throw obstacles in the implementation of the Universal Health Care Bill, which the Senate hopes to pass as early as next month or as late as February 2019.
“You can’t deprive people of health care services they deserve especially (now) we are about to pass the Universal Health care program. Let’s hope we don’t have a reduction in workers in the first year of implementation,” he said.
Mr. Duque said there was a competing call on the DoH’s resources from “mobile health stations and rural health centers, district hospitals, provincial hospitals.”
The senators also questioned the reduction in the 2019 budget allocation for the Health Facilities Enhancement Programs, which fell to P50 million from P30.3 billion previously.
“The better alternative is for the DBM to readily recommend amendments to the DoH budget so that it won’t be vetoed,” Mr. Drilon said.
Sen. Risa Hontiveros-Baraquel said that the HFEP budget needs to be restored to accommodate the DoH’s planned facilities projects.
“I will move that we restore the HFEP budget based on the list submitted by the DoH. Second, I also move to make a similar motion regarding the health and human resources budget,” she said.
“We can sacrifice the other (department’s budgets), but not health,” said Mr. Ejercito. — Gilian M. Cortez

DoTr, LTFRB say not causing Grab driver shortage

THE Department of Transportation (DoTr) and the Land Transportation Franchising and Regulatory Board (LTFRB) said they are not causing a shortage of ride-sharing drivers, contrary to the claims of Grab Philippines (MyTaxi.PH).
In a joint statement on Monday, the DoTr and LTFRB urged the company to withdraw its earlier claims that the government is causing its “supply crisis.”
“As DoTr and LTFRB seek ways to expedite to complete the target of 65,000 TNVS (transport network vehicle services units) with the required franchises, it is in Grab’s best interest to engage its own constituency and help clarify the issues,” it said.
The government was responding to an e-mail sent Grab Philippines to its customers last week, which blamed the LTFRB for its difficulties in meeting ride demand. It said the regulator’s master list of 65,000 vehicles, which are the only ones allowed to operate as TNVS, included inactive drivers.
“Grab submitted a proposal to LTFRB to increase the limit of cars to at least 80,500, taking into consideration the number of people trying to get a ride everyday. To date, no action has been taken by the LTFRB,” according to the e-mail.
“The LTFRB must review, clean up, and increase the supply cap of the masterlist,” it added.
The DoTr and LTFRB said, however, that drivers and TNVS should not be mistaken as the same, as TNVS in the master list are registered vehicles which could be operated by any driver.
“Grab seems to confuse drivers with TNVS in determining supply. LTFRB issues franchises or Provisional Authority (PA) to TNVS for them to legally get bookings and accept passengers. Hence, if a TNVS with a PA or franchise cannot run because it does not have driver, it can find a replacement driver,” it said.
It also noted that they recently added 10,000 new vehicles to the master list, and are planning to open applications for new vehicles to take the slots of inactive TNVS in the master list.
“We note Grab sharing its position on these issues in public notwithstanding the frequent, open and cordial dialogue with (transport network companies), including Grab. It makes us wonder… why Grab puts LTFRB on the spot, so to speak and in an uncomfortable position,” the agencies said.
In response, Grab Philippines country head Brian P. Cu in a statement apologized for the confusion and said it was a result of miscommunication.
“We would like to sincerely apologize for any miscommunication brought about by the (e-mail) to targeted recipients. In no way was this (e-mail) meant to undermine the ongoing progress and dialogues being undertaken to add TNVS supply,” he said.
He also praised the LTFRB for “treating this matter with the urgency it deserves.” — Denise A. Valdez

The rise of POGOs: A new landscape in e-casinos and sports betting

With the increasing popularity of e-gaming, foreign online casino operators have expressed keen interest in expanding their business in the Philippines. In fact, the Philippine Amusement and Gaming Corporation (PAGCOR) expects Philippine Offshore Gaming Operators (POGOs) to account for additional revenue of P6 billion this year.
Considering the huge foreign interest in the country’s online gambling business, PAGCOR must ensure that the industry is strictly regulated: revenue must be monitored, taxes should be paid, facilities should not be used to commit crime or engage in money laundering, and employees treated well. Offshore gaming implies that only foreigners, excluding Filipinos working abroad, can access online casinos. This limitation somehow assures us that our fellow Filipinos will not be dragged into gambling through these facilities.
WHAT IS POGO?
PAGCOR conceptualized POGO to enable the Philippine government to capture a greater share of the growing, yet previously unregulated, online gaming pie.
In 2016, PAGCOR issued rules and regulations covering the operations of POGOs. A POGO refers to an entity that offers and participates in offshore gaming services by providing games to players, taking bets, and paying the winning players. The gaming activity refers to online games of chance through the internet, using a network and software, exclusively for offshore-authorized players who have registered and established an online gaming account with the PAGCOR-licensed POGO. Filipino citizens, even while overseas, are not allowed to play.
PAGCOR can issue a POGO license to qualified operators, which could be Filipino-based operators or foreign-based operators.
The POGO framework also covers service providers that provide the various components of gaming operations, such as the gaming software provider, business outsourcing provider, and content streaming provider. These providers also need to secure a PAGCOR license.
TAXATION OF POGO
Under Revenue Memorandum Circular (RMC) No. 102-2017, POGO operators and accredited service providers are subject to three types of taxes. First income from gaming operations are subject to a 5% franchise tax in lieu of all kinds of taxes, levies, fees or assessment. This is the same tax regime enjoyed by PAGCOR. Second, income from other related services or non-gaming operations is subject to normal income tax, value-added tax, and other applicable taxes. Third, POGO operators are not relieved of their liabilities as tax withholding agents. Hence, compensation, fees, commissions, or any other remuneration for services rendered to a POGO by its employees and service providers (e.g., consultants, contractors) are subject to withholding tax on compensation or to the expanded withholding taxes.
COMPLIANCE REQUIREMENTS
The Bureau of Internal Revenue recently issued RMC No. 78-2018 to clarify the taxability of POGOs and their registration requirements with local tax authorities.
RMC No. 78-2018 further clarified that online gaming activity is sufficient to constitute doing business in the Philippines for a foreign corporation. Thus, a foreign POGO is considered a resident foreign corporation engaged in business in the Philippines, and is not considered a non-resident foreign corporation.
As of Q2 2018, there are 55 accredited POGOs, of which 45 are e-casinos and 10 taking sports bets. The number of POGOs is expected to grow, considering that the original cap of 50 licensees was waived by PAGCOR. The POGO and licensed service providers should comply with the following requirements:
REGISTRATION
All foreign-based and Philippine-based operators, including those that have already been issued a license to operate, are required to register with the Revenue District Office (RDO) having jurisdiction over the principal place of business on or before the commencement of business.
The “commencement of business” shall be reckoned from the day when the first sale transaction occurred, or within 30 calendar days from the issuance of the Mayor’s Permit or Professional Tax Receipt (PTR) by the local government unit or the Certificate of Registration issued by the Securities of Exchange Commission (SEC), whichever comes first.
The minimum documentary requirements to prepare and submit are BIR Form No. 1903, SEC Certificate of Incorporation or License to Do Business in the Philippines, Articles of Incorporation, Mayor’s Business Permit, Payment of Registration Fee, BIR Form No.1906, a final and clear sample of principal receipts or invoices, and the appointment letter of the Local Gaming Agent.
If a POGO transfers its registered address to a new location, it is the duty of the operator or its Local Gaming Agent to file a BIR registration update (BIR Form No. 1905) on the transfer to the new business address.
TAX FILING AND PAYMENT
POGOs must file the applicable tax returns on or before the due date, pay the correct internal revenue taxes, and submit information returns and other required tax compliance reports. The Certificate of Registration (BIR Form No. 2303) is a good reference for tax returns to be filed and paid.
BOOKS OF ACCOUNT
All POGOs must keep books of account and other business or accounting records, which shall be made available anytime for inspection and verification by a duly authorized Revenue Officer for the purpose of ascertaining compliance with tax rules and regulations. The registration of the books of account should be done within 30 days from the date of registration.
The rise of offshore gaming will definitely bring additional revenue that will help fund the government’s nation-building programs. However, the BIR acknowledges that the challenge with such operations is how we can implement a fair and equitable taxation of online gaming businesses and how we can monitor the revenues and revenue-generating activities of POGOs to lessen or, if not, to mitigate the potential tax revenues loss.
I hope that the generated revenue would really translate to concrete projects and let us not allow that our welfare not to be sacrificed in exchange for the perceived economic gains from gambling revenues.
 
Richard R. Ibarra is a senior manager of the Tax Advisory and Compliance of P&A Grant Thornton.
Richard.Ibarra@ph.gt.com
+63(2) 988-2288

Modernizing Tax Administration

Instead of increasing excise taxes on fuel and coal which has inflationary impact on consumer goods, the government must prioritize modernizing tax administration to broaden taxpayer base and increase voluntary compliance.
The Tax Reform for Acceleration and Inclusion (TRAIN) law aims to make our tax system simpler, fairer and more efficient but has included only a few administrative changes to complement the policy reforms. Despite its noble intention to unburden the middle class by lowering personal income tax, the offsetting measures introduced seem to have countered any expected benefit.
TRAIN’s goal was further compromised by the delayed implementation of the social mitigating measures. These assistances were intended to protect the ten million poorest households which did not benefit from TRAIN.
Increasing the excise tax on non-essential goods and services such as alcohol, cigarettes, casino, and mining is an acceptable offsetting measure. Excise tax that burdens the poor is not. What the tax reform should aim for as an offsetting measure instead is improving the revenue collection efficiency.
The second package of the tax reform program proposes administrative changes that will do so.
Overshadowed by the more significant portions of TRABAHO Bill are its propositions that aid the Bureau of Internal Revenue (BIR) in going after tax evaders, and more importantly, modernizing the revenue collection agency.
TRABAHO implements provisions that authorize electronic record keeping for receipts and sales reports, filing via electronic channels, and implementation of electronic sales reporting.
These modernization measures ensure that taxpayers will find it easier to file and pay their taxes. Still, how the changes are implemented would be crucial.
The filing via electronic channels should authorize electronic channels created by third-party software. More electronic channels would mean more options for taxpayers to file and pay their taxes. Taxpayers would then be able to choose which method will be most convenient for them.
For the electronic record keeping, it only authorizes the records for receipts and sales reports. However, it needs to include electronic bookkeeping as well. Manual books of accounts are tedious to accomplish and, with recent developments in technology, outdated. Electronic bookkeeping is already allowed, but only as an exemption when, on the contrary, it should be the norm. Manual bookkeeping should be the exemption, such as for the computer illiterate or those that cannot afford computer systems.
Proposed Major Tax Administrative Reforms
While already commendable, more can still be done to improve collection efficiency. The government needs to implement a comprehensive administrative reform.
The BIR’s budget needs to be raised in order for it to have the capability to modernize. Despite its increasing year-on-year revenue collection, its budget has decreased for 2018. As the administration’s tax reform initiative broadens the taxpayer base, the revenue collection agency would require more personnel to administer taxpayers.
A higher budget would also help in raising the salaries of BIR examiners. The current compensation system, bound by the Salary Standardization Law, is inflexible. Exempting the BIR from this regulation would create a more competent and less corrupt bureaucracy.
Thereafter, there needs to be provisions that govern a risk-based audit. Under the current system, audits are done on a yearly basis and to the same taxpayers over and over again. This is a costly and redundant approach. Quality needs to be sought for audits, not quantity. All the violations of the taxpayer should already be addressed during the first audit. This can be done by targeting high-risk business per industry, instead of targeting every single business.
In line with the policies on audit is the implementation of a no contact policy as much as possible. Moreover, examiners need to be made accountable for their assessments. If they are unable to collect at least half of their assessed deficiencies, then it should be a demerit on their performance. This should stop examiners from issuing large assessments with no bases.
Improving the tax administration is key in ensuring taxpayers will find it easier to comply with rules and regulations. Once taxpayers can easily comply, then it will be up to them to avoid unnecessary fines and penalties. Tax education is an important factor in tax compliance. While large seminars help in providing a general idea of the regulations, a more exclusive tax coaching will be suitable for answering questions specific to your business.
The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.
 
Raymond A. Abrea is one of the 2017 Outstanding Young Persons of the World, a Move Awards 2016 Digital Mover, one of the 2015 The Outstanding Young Men of the Philippines (TOYM), an Asia CEO Young Leader of the Year, and Founding President of the Asian Consulting Group (ACG) and the Center for Strategic Reforms of the Philippines (CSR Philippines).
consult@acg.ph.
map@map.org.ph
http://map.org.ph

Try to remember the Septembers of 1972 and 2009

It rained every day from September 1 to 19, 1972, placing Metro Manila and Central Luzon under water. Hundreds of lives were lost and crops worth millions were destroyed. The impact of the devastation on the economy wrought havoc on the already beleaguered Ferdinand Marcos presidency.
Marcos’s second term was to expire the following year and he was barred by the 1935 Constitution from seeking another reelection. The opposition Liberal Party was expected to choose Senator Ninoy Aquino as its standard-bearer in the elections scheduled the following year, with Senator Gerry Roxas as vice-presidential candidate. The surveys at the time forecast an Aquino-Roxas victory in the elections of 1973.
But Marcos was maneuvering to stay in power. He cajoled, pressured, intimidated, and/or bribed delegates to the Constitutional Convention then ongoing to promulgate a new constitution that would enable him to run again.
The destruction of crops had driven prices of commodities by about 25%, giving Marcos a reason to hint that the declaration of a state of emergency was necessary. He was also calling attention to the supposed increasing number of incidents of violence perpetrated by communist elements, to add credibility to his contention that emergency powers be given him.
On September 21, a Thursday, anti-Marcos organizations held a rally at Plaza Miranda to denounce Marcos’s apparent plan to impose martial law. In the afternoon of September 22, at the invitation of the students of the Asian Institute of Management, Ninoy Aquino shared with them his vision of the Philippines after Marcos.
Later that afternoon, Defense Secretary Juan Ponce Enrile’s Ford sedan was riddled with bullets while on the way to his house. In the first hour of September 23, martial law was imposed all over the country.
Fast forward to September 2009. It rained from September 1 to 22, flooding most of Metro Manila and Central Luzon. More than a hundred lives were lost and crops worth millions destroyed. The after-effect of the devastation on the economy placed the embattled Gloria Arroyo presidency in dire financial bind and put the highly criticized president in a desperate situation. Her numerous fabulous junkets had drawn heavily from the Emergency Fund and Contingency Fund. There was not much left in those coffers for relief goods for the victims of the great flood.
Arroyo’s term was to end on June 30, 2010. She was barred by the Constitution from running for reelection. The opposition Liberal Party had endorsed the candidacy of Senator Noynoy Aquino for president and Senator Roxas for vice-president. The surveys by late September showed that Noynoy had surged ahead in the presidential derby.
But Arroyo persisted in maneuvering to stay in power. Her minions in the House of Ill Repute resorted to all kinds of schemes to amend the Constitution so that she would be able to run again for president or to emerge as Prime Minister in a parliamentary form of government. She was confident that her scheme would be voted favorably by her many minions in the proposed constituent assembly.
The Mindanao conflict was escalating. Reports from military intelligence units said that terrorists had infiltrated Metro Manila. Then Energy Secretary Reyes warned that there could be failure of elections in 2010 due to nationwide power failure. He suggested that Congress grant President Arroyo emergency powers to allow her to address the energy crisis. Then Senate President Enrile theorized that the AFP Chief of Staff and the PNP Chief Superintendent can install a transition government in the event of failure of elections.
It seemed the citizenry was being conditioned to expect the declaration of a state of emergency or the imposition of martial rule. But on September 21 anti-GMA groups gathered at the Club Filipino to plan out activities to foil Arroyo’s schemes to stay in power.
Fast forward again, this time to September 2018. It has been raining not only in the first two weeks of this month but since August. Work and classes in Metro Manila have been suspended many times due to the torrential rains. Floodwaters in many towns of Bulacan and Pampanga had not yet receded when Typhoon Ompong dumped more rain on Central Luzon.
The worth of the actual damage wrought by the typhoon, considered the strongest anywhere on earth this year, has not yet been determined, but Agriculture Secretary Emmanuel Piñol estimates that agricultural damage in Cordillera, Ilocos, and Cagayan Valley can be as much as P7 billion. Rice and corn losses can amount to P3.3 billion and P4.2 billion, respectively.
That sizable loss in rice will aggravate the present shortage of rice, causing a further increase in the price of rice. Higher cost of fuel and consequently higher transport cost have pushed inflation nationwide above 6%.
Early this month, the President said that the “yellow” or the Liberal Party, Senator Antonio Trillanes, and communist rebels are plotting to oust him from office. He said those forces are working against the government by bringing up issues such as the rising prices of goods and rice supply. “Those three, watch out for them. Those behind the oust Duterte movement will go into a high gear in October,” he said.
On September 10, Presidential Spokesperson Harry Roque and other officials announced that the President would address the nation at 3:00 p.m. the following day. No details as to what he was going to tell the Filipino people were given. September 11 being the birthday of Ferdinand Marcos, many braced themselves for the declaration of martial law over the entire land.
After all, last May 23 he declared martial law over the whole of Mindanao after terrorists had seized Marawi City. The declaration covered all of Mindanao because military intelligence had reported that security problems also exist in other parts of Mindanao.
Fortified by the endorsement of the members of Congress of martial law in Mindanao, the President intimated that he was considering declaring martial law in the Visayas also as terrorists can easily slip into Mindanao’s neighboring islands and that martial law can be expanded to the whole country if terrorists are found to be operating in Luzon as well.
The Supreme Court’s decision upholding the validity of the declaration of martial law in the entire Mindanao region also recognized the power of the President to put the entire Philippines under martial rule on the basis of the terroristic acts in Marawi City. The Court declared that the Constitution grants the President the prerogative whether to put the entire Philippines or any part thereof under martial law as there is no edict that martial law should be confined only in the particular place where the armed public uprising actually transpired.
The Supreme Court having given its blessing to President Duterte’s propensity to put the entire country under martial rule, martial law all over the land has become a distinct probability.
But for some baffling reason, the President’s address to the nation which many expected to be his declaration of martial law nationwide was cancelled. The Filipino people heard instead a scripted dialogue between the President and the presidential legal counsel. The dialogue was so contrived to focus on the sins of Sen. Antonio Trillanes that it had little, if any, impact on the citizens.
The day after the poorly scripted and badly staged tete-a-tete, the President had another chat, this time with US Ambassador Sung Kim. The President said there was nothing earthshaking about the meeting. “I cannot discuss until I get his (Kim) permission. It’s a diplomatic tete-a-tete, but nothing earthshaking but more of confidentiality. But I hate to break the rules,” he said.
Is the United States through Ambassador Sung Kim cautioning President Duterte against imposing martial law over the land? Strange that President Duterte, who had cursed US President Barack Obama during an ASEAN conference in Laos, has to get permission from the US ambassador to discuss what they talked about in his own chamber.
It should be noted that the President had accused the United States, particularly its Central Intelligence Agency, of monitoring his mobile phone conversations, insinuating that the agency could be plotting to kill him. “They will kill me, those (expletive) he said in a speech before Cebu City officials last August 21, anniversary of the assassination of Ninoy Aquino. National Security Adviser Hermogenes Esperon was in Langley, Virginia headquarters of the CIA, recently.
On September 21, 1972, President Marcos signed the proclamation of martial law in the entire country. On September 21, 2009 civil society groups organized activities to foil President Arroyo’s plan to declare a state of emergency. It is with anxiety that I await this coming September 21.
 
Oscar P. Lagman, Jr. is a member of Manindigan! a cause-oriented group of businessmen, professionals, and academics.
oplagman@yahoo.com

Brew and grind an enterprise

By Raju Mandhyan
MANY years ago, I failed at two attempts at starting and running my own business. The first time, I failed at putting up a trading business with a partner from the Middle East. The second time I failed at making success of a small retail business with my spouse as a partner. Sometime in the late 1980, I started and began to nurture a third enterprise. For this third time, before I ventured into it, I spent years understanding and experiencing the trade. I spent years in knowing the supply side and the demand side in the industry. I spent years saving up money and building up other resources and connections in the industry. I’d also spent years in learning the rights skills and competencies to help me become a self-dependent, and a complete entrepreneur.
I remember one morning, six months and a year into it, I was in the middle of strapping some cartons for a shipment when an officer from the Department of Labor and Employment came knocking at my door. He was conducting a random, spot inspection for unfair and inhuman treatment of employees by small business owners.
“As an owner of this company, I wouldn’t mind answering a few questions would I?” he asked.
“Sure! Go ahead and be my guest.” I replied.
“How long has this business been operational and what is it that you do?”
“Well, it’s now been a year and half. We are in the business of trading soft goods like house decor, apparel, handicrafts and stuff. We buy them here, in the Philippines, and then we ship them to clients across the world.”
“Hmm, that must be quite lucrative and how many people do you have working here?”
“Two. A girl and there’s this bloke.”
“Can you please describe the job of the girl?”
“Well, she answers the phone, takes messages, files loose papers, types a letter a day, once in a while makes weak coffee and every fortnight runs to the bank to draw her salary.”
“Right, that sounds like she is the Office Assistant. Awful supporting aren’t they? Does she put in any extra effort for the business?
“Oh, yes, yes! She takes time to fix her hair, powder her nose, file her nails, and chat on the office telephone with her girlfriends on weekdays and her boyfriends on Fridays. Then there are also days when she doesn’t have a boyfriend, she spends her days crying and eating chocolates in the office. Poor little girl!”
“Oh, that’s quite sad. How many hours a week, would you say, does she suffer like this in here?”
“Oh, the poor thing, she comes in a bit after 10 in the morning to avoid the morning traffic and leaves just before 4 in the afternoon, to beat the evening traffic on weekdays. On Saturdays, she drops by for a quick brunch and then leaves to get her hair done.”
“Gosh! That’s over 30 hours a week and does she get a fair pay, social security, health insurance, all the prescribed holidays, annual vacation and sick leaves too?”
“Oh, yes she does get all that plus another three days every month.”
“That’s quite okay. Now about this bloke who works here what exactly does he do?”
“This ‘bloke’ as you call him gets the orders, draws the contracts, does the purchasing, chases the mills for delivery, drives the truck, manages the inventory, packs the shipments, does the billing, cleans the car, answers the phone and makes coffee when Jane is not around.”
“Sounds like quite a handy man. What are his working hours around here?”
“He’s here before the break of dawn on Mondays and then stays till all the work is done for the rest of the week.”
“That’s amazing! Does that mean he also sleeps over here?”
“Yes, on that wooden bench over there by the dog-house.”
“That looks quite inviting and warm. Now, does he get a fair pay for his hours, social security, medical and health insurance, annual vacation and sick leaves?”
“Oh, yeah sure!” He gets two square meals a day, a daily cup of weak coffee, a pack of cigarettes every month and he is also allowed to sneak off early on Christmas Eve and come in a bit late on New Year’s Day.”
“That’s preposterous and inhuman! Sneaks off on Christmas Eve! I think you, Sir; you are an animal, a monster and a slave-driver! Please call that man, here, right now! I’d like to see the poor slob!”
“Sir,” I said quietly, “you are looking at him!”
Though this story is slightly sprinkled with sugar and spice, it does come close to putting across the point that an entrepreneur, a business owner, has to work, eat and sleep like a dog. He has to put in atrociously obscene amounts of time, effort and dedication for the success of his business. It is all a lot of blood, sweat, and tears.
Entrepreneurs do not get born, they are made. In my early teens, I was surrounded by a large, close and distant, family of entrepreneurs. Most all of them either owned a store, a trading business or a small manufacturing or service business. During our family get-togethers they would talk shop, compare notes and share tips on how to start something new or improve and expand existing businesses. All of them considered owning a business was the most proper and decent way to live. “Working for others?” Well, it was “working for others” and it was looked upon with disdain and shame. There was, and is, pride, honor, and freedom to earn and grow exactly as one wished for in a self-owned enterprise.
One of the many, very Indian, catch-phrases my grandfather used to nag me with was, “Apni ghoat to mazaa aaye!” Literally translated, it meant, “The fun lies in brewing and grinding your own.” Metaphorically, it meant, “If you want to amount to something, if you want to make it big and be fulfilled then start and build something on your own.” This kind of subtle and consistent programming of our minds by our elders was our family’s culture. The young ones, in response, had no choice but to constantly think, explore, talk and dream business opportunities and ventures. This influence and programming by the elders of the family was quite intense. The long-term results of this culture building were resilience, tenacity, and the ability to save, survive, and build from scratch. These entrepreneurial habits got seeped into our neuropsychological systems for life.
A large percentage of my family members are still private business owners and continue to breed their offspring into the same atmosphere and culture. I, personally, moved in out of the corporate world and the world of the rugged, resilient and resourceful entrepreneurs. I regard both breeds with respect and reverence for their skills but here, in this book, I pay homage to the maverick, the jack of all trades — the enigmatic entrepreneur!
 
Raju Mandhyan is an author, coach and speaker.
www.mandhyan.com

Investors watchful of US-China Trade War, most expect improved investment environment

INVESTORS around the globe are watchful of the international political and financial developments that center on US and China’s current trade relation. The emerging markets have already started to bear the scorch of conflict between the two colossal economic powerhouses.
After a pause the trade war resumes, US is preparing to impose fresh tariffs on USD 200 billion imports from China. Beijing vows retaliation and it may take similar measures on USD 60 billion worth of imports from the US. The fallout would mean that consumers from both countries will be paying higher cost in the event companies pass the extra burden to their customers. This may result in a decline in demand and less purchase.
Fed interest rates which hover at 2% are expected to hike two to three times this year, as US is preparing for an appreciating greenback. This sets the stage for global investors to dive into the greenback. Hence, what we may see is emerging market currencies taking a squeeze.
Trade war and factors like Fed’s rate hike have triggered emerging market sell-off entailing contagion effect. Emerging markets and economies often have more debts and, if faced with credit crisis, investors may pull out currencies from these markets, further complicating the predicament. With the greenback and the US treasuries as the world’s safest assets, the greenback is still commonly the opted choice. The worst has not happened, as interbank-funding markets still have not seen a hike in demand for dollars. However, in case the real crisis breaks out, the cross-currency swaps will see surge with the rise in uncertainty.
trade war
In China, on the other hand, as uncertainty looms, coupled with the unyielding debt defaults and peer-to-peer platform failure, investors instead of going into stocks are going to traditional bank deposits. China’s stock market, like the Shanghai Composite, has entered into year’s second lowest on trading last week. Similarly, China’s bond market has seen a yield curve steepening since June 2018. It means that Chinese government is still using monetary policy to reshape the economy at the lower end of the tail.
Chinese government is trying to keep a good momentum of growth which is propelled by commitment and reform. China’s Ambassador to Indonesia Xiao Qian while talking about country’s economy said that China is constantly upgrading its economic structure and fostering internal growth.
In an article for Indonesia’s The Jakarta Post he opines that Chinese economy is moving towards consumption based, and has reduced reliance on the traditional growth model of investment and export. He stressed that China will continue to open up further and deepen its mutually beneficial cooperation with their partners.
Since April 2018, at the Boao forum in Hainan Province, a series of opening up measures was disclosed. For example, China’s recent move to lift restrictions on foreign ownership to a large extent in service and manufacturing industries, financial service and auto industry. This year even manufacturer Tesla has signed a deal with its Chinese partner to open a factory in Shanghai.
Nonetheless, the whole situation has discouraged investors and generated a very positive sentiment, although very little; on China’s economy but that does not mean that Beijing cannot take the hit of abrupt slow down. Investors are watchful, which is not totally irrational behavior, it is believed that once the tensions between China and US ease, and the dust is settled their confidence will be reinstated. There are two sides of the coin, the other side is that the present situation may be an opportunity in disguise for investors to buy and long Chinese stocks at a bargain.
Like most investment gurus would pitch: buy when most are selling, and sell when most are buying. The current weak market seems to fit in this mantra.
 
CHINA KNOWLEDGE

Palparan, 2 others convicted for 2006 kidnapping

RETIRED ARMY general Jovito S. Palparan, Jr. and two other military officers were convicted of kidnapping and serious illegal detention by a local court on Monday.
This is in connection with the abduction of Karen Empeño and Sherlyn Cadapan, two students from the University of the Philippines, in 2006, at the height of the Arroyo administration’s campaign against communist rebels and their network in civil society and the academe.
Malolos City Regional Trial Court Branch 15 Judge Alexander P. Tamayo ordered the penalty of reclusion perpetua, 20 to 40 years of imprisonment, against Mr. Palparan and Lt. Col. Felipe G. Anotado, Jr. and S/Sgt. Edgardo Osorio.
UP students Karen Empeño and Sherlyn Cadapan were said to be conducting field research on the plight of Bulacan farmers when they were abducted in 2006. They have not been found since.
Mr. Palparan and his fellow convicted kidnappers were also ordered to pay P100,000 to the heirs of Mss. Empeño and Cadapan as civil indemnity and P200,000 in each case as moral damages.
Another of the accused, however, remained at large. The same court issued an arrest warrant on M/Sgt. Rizal C. Hilario, even as it issued its decision on his fellow accused.
As commander of the 7th Infantry Battalion, Mr. Palparan became notorious as “berdugo” (the butcher) among the activist community. But from being one of the favored generals in President Gloria Macapagal-Arroyo’s administration, he became a fugitive after an arrest warrant was issued against him in 2011, and was caught in 2014 in an apartment not far from Malacañang.
Presidential Spokesperson Harry L. Roque Jr. said: “We respect the decision of the court and we would want justice to be done to the victims.”
For his part, Justice Secretary Menardo I. Guevarra told reporters in a text message: “Justice may come a bit late, but it does come. Let’s believe in that.”
Sen. Francis N. Pangilinan, in a statement said, the decision sends a “strong signal” to violators of human rights.
“This should send a strong signal to the AFP, the PNP, and the rest of those in government that sooner or later the law and our justice system will hold to account violators of human rights. As a father, I also wish the whereabouts of Sherlyn Cadapan and Karen Empeño, who have been missing since 2006, to be known,” he said. — Vann Marlo M. Villegas

Budget debates stalled amid friction in House

PLENARY DEBATES on the proposed 2019 budget were stalled at the House of Representatives on Monday amid a brewing conflict among the House leaders.
Majority Leader Rolando G. Andaya, Jr. said the committee report on House Bill 8196, Fiscal Year 2019 General Appropriations Bill, has not been endorsed to the plenary by the Rules Committee.
“(The) committee report is still being ironed out, ‘yung sinasabing ayaw niya pirmahan (the one he doesn’t want to sign),” Mr. Andaya told reporters in a press briefing, Monday, referring to Appropriations Committee Chair Karlo Alexei B. Nograles.
On the other hand, Mr. Nograles claims that the committee report had been prepared as early as last week.
“We’ve been ready and willing to defend this since… we approved the committee report last week,” Mr. Nograles said.
He also disclosed the House leaders had instructed him to conduct a committee meeting on Monday morning, ahead of the scheduled debates at 10:00 a.m.
“There was a meeting. They wanted me to conduct a committee hearing this morning. They wanted me to approve other committee report(s) which did not happen,” Mr. Nograles told reporters in an ambush interview.
Mr. Andaya, however, disputed Mr. Nograles, saying it was he who called the meeting.
“I think he’s the one who has the copy of the committee report… I cannot prepare a committee report for him. I’m not the chairman of the Committee on Appropriations. I can only suggest things to him,” the Majority Leader also said.
When asked when the chamber plans to resume plenary debates, Mr. Andaya said “hopefully, tomorrow morning we can start.”
Also on Monday, Minority Leader Danilo E. Suarez said there were plans to oust Mr. Nograles from the Appropriations Committee.
“The minority leader cannot speak for the majority coalition, and has in fact already withdrawn his previous statement,” Mr. Nograles said in response.
“Be that as it may, if anybody wants to remove me as Chair of the Committee on Appropriations, then they can have the position, but they cannot be allowed to make the President break his promise to our people,” he added. — Charmaine A. Tadalan

PSE index ends flat in super typhoon’s aftermath

THE MAIN INDEX barely moved on Monday as investors stayed on the sidelines following the typhoon that ravaged some parts of the country over the weekend, alongside prevailing fears over the trade war between the United States and China.
The bellwether Philippine Stock Exchange index (PSEi) eked out a gain of 0.41 point to close at 7,413.56 on Monday, ending flat after losing more than a percentage point last Friday. In contrast, the broader all-shares index dropped 0.11% or 5.3 points to 4,550.
Analysts noted the lower-than-usual turnover for the session, which dropped to P3.94 billion from Friday’s P6-billion turnover after some 968.13 million issues switched hands.
“Value turnover was unusually low after slowly climbing higher the last few weeks as investors are trying to assess the damage caused by the typhoon that passed through Northern Luzon over the weekend,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile message.
The Philippine National Police on Monday reported that the casualty count brought by super typhoon Mangkhut — locally called Ompong — has already reached 65, with 54 of this from the Cordillera Administrative Region. The government said at least 250,000 people across seven regions in Luzon were affected by the typhoon, with more than half staying in evacuation centers.
“We remain vigilant in the coming days especially as the full effects of Typhoon Ompong start to materialize. Recall how the provinces of Cagayan and Isabela, producers of rice and corn, were hit which may add pressure on inflationary effects this month,” Papa Securities Corp. trader Gabriel Jose F. Perez said in an e-mail.
Regina Capital’s Mr. Limlingan further attributed the market’s weakness to US President Donald J. Trump’s new pronouncements on their trade spat with China.
“Sessions were marked by whipsaw action due to reports that Trump still wants to impose tariffs on China despite previous news of easing tension,” he said.
Four sectoral indices ended in negative territory, led by the mining and oil sector which lost 1.64% or 159.97 points to 9,557.27. Financials shed 1.08% or 18.07 points to 1,649.22; holding firms went down 0.65% or 47.43 points to 7,204.48; while services slowed 0.05% or 0.77 point to 1,516.74.
Meanwhile, industrials firmed up 1.12% or 122.59 points to 11,071.53. The property counter also climbed 0.89% or 32.97 points to 3,727.37.
Decliners narrowly outpaced advancers, 99 to 95, while 44 names ended flat.
Net foreign outflows dropped to P250.88 million yesterday versus Friday’s P815.36 million.
The session’s list of 20 most actively traded stocks showed an equal split between losers and gainers. Among the day’s gainers were SM Prime Holdings, Inc. (up 1.65%), Ayala Land, Inc. (up 1.46%), Universal Robina Corp. (up 2.83%), and Alliance Select Foods International, Inc. (up 15.18%). — Arra B. Francia

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